Economic Substance Requirements In The British Virgin Islands

Overview

In response to the OECD's global Base Erosion and Profit Shifting ("BEPS") initiative and EU Code of Conduct Group substance requirements modelled on BEPS Action 5, the British Virgin Islands ("BVI") has enacted the Economic Substance (Companies and Limited Partnerships) Act, 2018 (the "ES Law"). Similar legislation has been introduced in numerous jurisdictions, including the Channel Islands and the Cayman Islands. We note that a draft Economic Substance Code to accompany the ES Law was issued on 23 April 2019 by the British Virgin Islands International Tax Authority ("ITA") and it is expected that following a period of public consultation a final Economic Substance Code will be published shortly.